Tesla and Panasonic freeze costs at a $ 4.5bn Gigafactory

OSAKA – Tesla and Panasonic freeze plans to extend the power of their Gigafactory 1, the world's largest electric power station for EV batteries, given the worsening demand for the Elon Musk Automobile Company on Wall Street

to increase its power by 50% next year, but With sales of electric vehicles performing below plans, the two companies came to the conclusion that a large investment at this stage puts too much risk, Nikkei learned. the manufacturer of electric vehicles, in the order of 1

million cars a year, will be discarded at the moment.

The solution reflects the dilemma facing the electric vehicle industry. Reducing the cost of production – the key to attracting more buyers – requires significant investment in innovation. But this is difficult under the tiny profits that power plants produce.

Tesla shares fell by more than 3% on Thursday trading on Nasdaq.

Gigafactory, in the state of Nevada, made batteries for the Panasonic 3 model, one of the world's largest electric vehicle battery makers, producing cells, and Tesla combines them with rechargeable batteries before collecting cars at their factory in California.

say they are capable of delivering more than 500,000 cars annually. By 2020, the companies intended to expand their capacity to 54 gigawatt-hours per year to 35 GWh.

Tesla sold 245,240 vehicles in 2018. This year it plans to sell 360,000 to 400,000 cars, but supplies were delayed through production bottlenecks. Since last summer, Tesla executives have ceased to specify the target date of reaching 1 million cars annually.

View from Tesla's Gigafaktery near Sparks, Nevada. The plant, they say, currently has the capacity to provide more than 500,000 cars a year.

Tesla and Panasonic have invested $ 4.5 billion in the plant for today. Six months ago, in October, the president of Panasonic Kazuhiro Zuga said that the company will consider the issue of "further investment in North America, keeping pace with Tesla." As it was reported, he is considering the possibility of issuing an additional 100 billion Yen to 150 billion Yen ($ 900 million up to $ 1.35 billion) at Gigafactory. a year earlier. Damages were aggravated by delays at the start of model 3 production.

The Tesla sales unit fell by about 30% in January-March, compared with the previous quarter, suffering from slower growth in China, lower tax incentives for electric vehicles and problems. with logistics This made the company more cautious about the future, although they plan to continue the joint operation of the plant.

Wall Street analysts have recently expressed concern over the fall in demand for Model 3. Goldman Sachs analysts report April 4, "The company's 2019 output is too high, and consumer demand is likely to be lower because US subsidies are stopped" 19659002] Tesla plans to launch a small SUV model Y, which will likely use the same battery as Model 3. The two companies will review their expansion plans for the Gigafactory in 2020 or later, depending on how well the models are sold.

"We will, of course, continue to invest in Gigafactory 1, if necessary

Panasonic will also cease its planned investment in an integrated car battery and Tesla power plant in Shanghai. Instead, it will provide technical support and a small amount of batteries from Tesla is obliged to buy batteries for cars built at a Shanghai factory from several manufacturers.

Prices for Tesla cars start at $ 35,000 for Model 3, its lowest-priced model. The batteries make up about half rtosti EV.

Given the relatively small profit on these cars, significantly reducing the price of batteries will be difficult without further technological advances. And lower prices on labels is crucial to get more electric cars on the road.